Fiat touts cleaner engine Chrysler could use

The Associated Press
Published: March 4, 2009

GENEVA: Italy's Fiat Group SpA unveiled a new engine at the Geneva Auto Show on Wednesday that shows the kind of groundbreaking technology driving a proposed alliance with U.S. Chrysler LLC.
The Multiair is a two-cylinder engine that Fiat claims is revolutionary in design, making it possible to reduce both fuel consumption and carbon emission up to 10 percent by controlling air flow during the combustion cycle, while downsizing from four to two cylinders saves weight as well.
"In short, Multiair controls air to save fuel," said Alfredo Altavilla, chief executive of the Fiat subsidiary FPT Powertrain Technologies that developed the motor. "It is one of the key assets of the Fiat Group product and alliances strategy."
Multiair will debut in Alfa Romeo's MiTo beginning in the fourth quarter, before its rolled out across the company's brands.
More importantly to the troubled auto industry, looking for ways to improve environmental performance, the technology will be available to any of Fiat's partners — which can include Chrysler as soon as an alliance announced last month is finalized.

As part of the process of securing a deal, Fiat CEO Sergio Marchionne has jetted from Geneva to Washington D.C. to testify to lawmakers. The partnership would give Fiat a 35-percent stake in the U.S. automaker in return for new technology but no cash.
U.S. lawmakers have expressed concerns about the implications of a significant foreign stake in a major U.S. automaker. But the deal would give both automakers access to the other's markets and technologies.
Industry observers say the deal could be critical to the future success, if not survival, of both carmakers as the industry faces its most severe crisis ever, with volumes in Europe down by one-third and in the United States by as much as half.
Jim Press, Chrysler's president and vice chairman, said Fiat's strengths complement Chrysler's weaknesses — but that no decisions have been made yet on which specific automobile models and technologies Chrysler would exploit until the deal gets clearance.
"With Fiat there is a really good hand-in-glove match," Press said.
Fiat can offer Chrysler an array of high fuel-efficient small and mid-size cars and trucks, as well as technology to lower carbon dioxide emissions — areas where Press conceded Chrysler is "not as strong as we need to be in the future." Also, it would give Chrysler a foothold in Europe and other world markets where Fiat is present.
"It really brings the best of both worlds for both of us. Together we get economies of scale in purchasing. We get economies of development. And the distribution is an ideal fit because there is no conflict in our existing distribution system in North America," Press said.
Fiat's Marchionne had been shopping for a U.S. partner to launch both Fiat's hugely successful update of the successful 500 subcompact and its sporty Alfa Romeo brand when the economic slowdown took the wind out of auto production. Initially, he had hoped to bring the 500 to the United States by the end of last year.
Marchionne has made strategic partnerships a key part of his turnaround of the once-failing automaker, clinching alliances from China to Serbia to share platforms and technologies and launch Fiat in new markets. A stronger line of reliable, fun-to-drive cars has helped rehabilitate Fiat's image.
"It is very clear to me that Chrysler needs Fiat more than Fiat needs Chrysler," said freelance auto industry analyst Rebecca Lindland. "I think that Chrysler will benefit from Fiat's smaller cars and its powertrain expertise. Fiat is the world leader in smaller, efficient engines, both petrol and diesel."
Fiat has championed diesel technology with its Multijet engines, and the Multiair will come out with a diesel version in 2011, Altavilla said. He expressed interest in Chrysler's four-wheel drive technology.
What happens if the deal collapses?
Press said Chrysler, which is trying to secure another $5 billion in loans from the U.S. government by March 31, could look for another partner.
Lindland wasn't so sure.
"I think Fiat is probably in a strong enough position that I am sure it has other options for other alliances," she said. "For Chrysler, if the Fiat deal doesn't happen, they don't have a lot more options to secure."